Jericho for Justice

A Brief Overview of Publicly Funded Healthcare Programs for Low-Income Families

In each of the following issues of the newsletter we will highlight some of the issues facing low-income people and the state proposals that currently address or need to address those issues. Because so much of the Governor's budget cuts affect health care, we begin with this issue.

Medi-Cal, jointly funded by the state and the federal Medicaid program, is the main source of health care coverage for more than 5 million Californians each year. Although some people associate Medi-Cal only with welfare, more than half of the program's funds go towards services for the elderly, disabled, and other populations.

Medi-Cal also provides important coverage for working families with low-incomes. However, it is estimated by the UCLA Center for Health Policy that there are 6.3 million Californians without health insurance at some time during the year-the great majority of them from low income "working poor" families with inadequate access to affordable healthcare. There are about 10 million Californians without prescription drug coverage. More than 3 million Californians who are uninsured have annual incomes that are below 200% of the federal poverty level.

Children Are Primary Beneficiaries

More than half (53%) of those who benefit from Medi-Cal are children. Yet, of California's over 9 million children, about 1.62 million children are uninsured, according to UCLA Center for Health Policy Research. Over 1 million are currently eligible but not enrolled in one of the state's health-care programs and another 445,000 uninsured need, but are not eligible for, subsidized healthcare.

In 1997 Congress created the State Children's Health Insurance Program (SCHIP) so that states could expand Medicaid and/or develop new options to insure low-income children. California chose to expand Medi-Cal AND create a new health insurance program called Healthy Families.

Healthy Families Program Expands Medi-Cal

The Healthy Families Program (HFP) began the following year to provide health coverage for children in families with incomes too high for Medi-Cal but below 200% of the Federal Poverty Level (FPL). The program was later expanded to include children in families earning below 250% of the FPL, ($38,160 for a family of 3 in 2003) covering an additional 101,000 children.

Healthy Families provides low-cost health coverage to uninsured children up to age 19 who live in low- and moderate-income families. Unlike Medi-Cal, most parents must pay premiums and co-payments for their children to participate in the program. To qualify, children must be uninsured, ineligible for Medi-Cal, and cannot have been covered by an employer's plan within the last three months.

The UCLA Center for Health Policy Research estimates that Medi-Cal and Healthy Families combined cover 16% of California children and adults under 65-a total of 4.65 million people. However, nearly 500,000 children are not eligible for either Medi-Cal of Healthy Families because their family incomes are over 250 percent of the federal poverty level or because they are undocumented.

Health Care Through the Private Sector

Since a great number of low-income families needing health insurance are working, it stands to reason that their health coverage would come from their employer. Many families piece together two or more jobs-none of which offer health insurance to their part-time or even full-time employees. This is particularly true of service jobs that also generally pay at the low end of the wage scale.

Annual premiums in 2002 for employer-provided health insurance averaged $2,845 for single coverage and $7,471 for family coverage. The average worker contribution was $342 annually for single coverage and $1806 for the worker share of family coverage or $151 per month. With the cost of housing, childcare, and transportation already taking a significant part of a family's income, health insurance-however necessary-becomes out of reach for many lower-wage workers.

An Evolving System of Services

The original public "safety net" in California for health services was the responsibility of the counties-mandated in Section 17000 of the State Welfare and Institutions Code. County hospitals, often connected with a county poorhouse, operated hospitals financed primarily through local property taxes. Because initially they served only the poor, there was a two-tier system of healthcare-one for those who could pay and another for the poor.

Public medical assistance came initially for the elderly. Then in 1965 with Medicaid, the Medi-Cal program was intended to integrate the private and public systems by giving poor people the ability to purchase services in the mainstream health system. Unfortunately, those doctors who would take Medi-Cal patients were the exception-many said because of the paper work, delays, and reimbursement rates.

Between 1950 and 1970 the county costs for providing health services to those poor not covered by Medi-Cal rose substantially. The passage of Proposition 13 in 1978-which cut property taxes and limited the ability to increase other taxes-had a severe impact on the counties ability to fund services. In the past decades the state and counties have struggled to piece together a mixture of funding streams for health services to low-income people.

Alongside this public effort-and pre-dating it-is the network of private health services. Uninsured children receive health care services every day in their local neighborhoods through the help of community-based organizations and clinics, and through religious and philanthropic support. Many of these depend upon federal and state support to maintain some part of their services.

Improvements Through Advocacy

Over the years advocates for greater healthcare access have worked to simplify a complicated system for those who use it, to ensure that those eligible become enrolled, and to expand coverage to include more of those who need it.

The application process, while improved, is still cumbersome for many people, eligibility standards vary for different programs and many people still do not know that they are eligible for one or another program.

Healthy children do better in school and are better able to contribute. Healthy parents are better able to raise healthy children. The goal is coverage for all of California's low-income families in a comprehensive, "user friendly" system. It will take awareness and will on the part of all Californians to make it happen.

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